NIFTY - Potential Trading Opportunities - 10/17/2016

Saturation point for equities has arrived. For the time being at least. Full fledge Brexit bandwagon, US election uncertainty and Fed rate hike certainty is going to put a lid on equities. One can argue that we have been on this path before and stocks are always supported after big drops. While that argument is valid, investors should not rush to buy it during every 50 / 100 point drop. In fact this is still ridiculous level for long term investors to buy in bulk so don't expect big support from bargain hunters.
Based on current situation, following levels are very attractive in NIFTY to trade from buy side. 8250 first and 8000 second. Those who are currently short or planning to short on bounce should target these levels as take profit targets. We are short via puts and will add more during bounce toward 8750. 8750 / 8800 resistance level should provide good place to enter fresh shorts if you have missed.
In short, strategy is to be short on bounce with target of 8250 / 8000 in coming sessions and then reverse. Need to be cautious at the time of buying though because it depends upon the circumstances at that time. But with everything else equal, 8000 / 8200 can be worth couple of 100 points trade in NIFTY .

NIFTY and Bank NIFTY goes hand in hand. Currently it is bouncing off the support at 19000 but initial approach to 20,000 should be sold in my opinion. During the drop down, 18000 and 17000 should provide good support initially.